Teresa Ghilarducci on Pension Reform

Teresa Ghilarducci is a staunch advocate of comprehensive...

The Top Reasons to Consider an Annuity

Annuities are complex, largely misunderstood, and often misrepresented in popular financial media.

The reality, though, is that these financial products are becoming an increasingly important part of the financial plans of millions of people around the world.  In fact, annuities are a vital component of the...

Defined Benefit Pension Plans are Not Without Risk

If you ever find yourself envious of those who still have access to the classic defined benefit pension plan through an employer, it is worth remembering that they are not completely risk free. In the wake of the financial crisis, many employers are finding that their defined benefit pension plans are both underfunded and unsustainable. One natural course of action in response to this situation is filing for bankruptcy. In this situation, much of the value that has been promised to employees...

The Average 401k Balance Decreased 24% in 2008

A recent report from the Employee Benefit Research Institute and the Investment Company Institute reveals that the average long-term 401k balance decreased 24% in 2008. This figure includes contributions from both employer and employees. In addition, the losses are worse (30.5%) for accounts that were created more recently. The report also addresses the amount of time it could take for account balances to recover to beginning of 2008 levels. At lower assumed levels of equity market returns, the...
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Treasury Officials Seeking Automatic Annuity Options for 401k Plans

Officials from the Departments of Treasury and Labor want annuities to be a default option for workers who participate in employer-sponsored retirement plans such as 401ks. At a recent industry conference, Treasury senior advisor Mark Iwry spoke of creating annuity -based lifetime income options within the defined contribution 401k arena. Issues such as credit risk and portability continue to present obstacles to progress. Employer fiduciary liability with respect to in-plan annuity selection...